Analytics put insurers in a better position to assess Harvey’s damage

Hurricane Harvey, which hit the Texas coast on Friday night, devastated the city of Houston and may cause some $40 billion in property damage across the state. But recent innovations in the use of data analytics and related technologies have put insurance companies in a better position to assess and manage the consequences associated with catastrophic storms

“Five or six years ago, analytics was more of a modeling exercise,” notes Karen Furtado, a partner at the insurance consulting and advisory firm Strategy Meets Action. “Now it’s used in real time to evaluate risk.”

That means that insurance companies will quickly be able to comprehend the precise impact of the hurricane and provide rapid restitution to their customers with claims.

“There will be no guessing if their policyholders were impacted or not,” Furtado says. “Analytics provides them with real-time information about who was affected and the severity of the impact.”

Predictive analytic tools, Furtado adds, also allow residential and commercial property insurers to prepare ahead of time for major storms like Harvey by projecting the most probable outcomes for their business and their policyholders. Furtado points to many instances of an insurer imposing a moratorium on writing business in a particular geographic zone, because it now has the information it needs to accurately assess the scope of the impending risks.

“Analytics gives insurers the ability to better control their risks prior to an event,” Furtado observes. And on the flip side, “Insurers have their eyes wide open,” when it comes to selecting the most profitable areas in a geography that’s prone to flooding.

One tool in particular that Furtado singles out is aerial imaging, which gives insurers much more accurate data on the impact of hurricanes and other major weather events. Satellites, drones and fixed-wing aircraft have mapped the entire country to a 10-meter grid, capturing images of every home and commercial property in the U.S. in the process.

These images are continuously updated, and when an event like Harvey occurs, insurers now have the potential to compare before and after photos of covered properties in real time, according to Ryan Kottenstette, CEO of Cape Analytics, a provider of spatial data analytics. Such post-event image analysis, he says, enables insurers to respond to claims much faster and with a much greater degree of assurance.